Are indie app stores screwed?

India app stores may be in trouble
India app stores may be in trouble

We all know that the app world is exploding but as the market grows, will the independent app store providers like Handango, GetJar and others get squeezed out by platform makers and handset providers?

That’s the question posed by an interesting story in the Wall Street Journal. Handango, for instance, has been acquired by PocketGear and it will be primarily working on creating stores for carriers. Can companies like GetJar and forthcoming app stores from Amazon and Verizon be successful?

The WSJ breaks down the figures:

Revenue for mobile apps is expected to more than double to $32 billion in 2015 from under $10 billion in 2009, according to Juniper Research Ltd., a U.K.-based market research firm.

But Apple, which offers more than 300,000 free and paid apps in its App Store, has captured most of the business. Of the roughly 2.6 billion apps downloaded from stores in 2009, Apple took 65%, Juniper says.

GetJar accounted for 15%, and Google, wireless carriers and other handset makers accounted for the rest. Windsor Holden, an analyst at Juniper, expects the picture to change this year, with Google’s Android Market gaining share.

GetJar has been very successful without being tied to a single platform, as it has seen more than 1 billion app downloads including more than 100 million for the Facebook app alone. GetJar is experimenting with new business models, as it is also paying developers to offer their games for free in order to draw attention.

For all the flexibility that a company like GetJar has, it still has to overcome the difficulty of not being preloaded on most devices. Android will continue to be an open platform for other app stores but the iPhone and Windows Phone 7 will continue to only have one official app store. If BlackBerry and webOS decide to go that route, the challenge for the indie app stores may grow even larger.

[Update] We’ve heard from GetJar and the company calls the WSJ story “incredibly inaccurate” because the author did not do his homework.

While companies like Handango and other indie app stores may be feeling the squeeze, GetJar has been very successful so far and it expects that momentum to continue as more uses pick up smartphones. It’s still a tough business – especially when you’re directly competing against the likes of Apple, Google and Microsoft – but GetJar should not be lumped in with some of the other struggling app stores.

[Via The Wall Street Journal, photo]

  • I think that developing applications still can turn into a lucrative business with enough quality and buzz, eventhough the competition is so high, market is so large and becomes larger each day. No discouraging… yet.

    • Patrick

      totally agree 😉 we see great new developers every day and some amazing content. monetization will only improve.

      P

  • Patrick

    Indie app stores face a challenge. That’s fair enough. But with all due respect the WSJ article is badly flawed and very poorly researched. With respect to GetJar it ignores some very obvious facts:

    – GetJar isn’t designed for the iPhone user but for all others. You can’t download apps for iPhone from GetJar given Apple’s closed system. Where we help is by making app discovery across platforms easy for the rest of the 95% of the world who doesn’t have iPhone. Asking an iPhone user why they don’t use GetJar is like asking Tiger Woods what the best tennis court is (they are totally unrelated). We support the rest of the market for apps and if you look at how fast Android is growing….that’s a pretty lucrative market
    – The article fails to mention that GetJar was profitable since inception in 2005. We only dipped into the red this year because we decided to turbo charge our growth and you need to invest in growth. Other successful companies like Twitter, Facebook and Amazon have all had to deal with this issue.
    – Downloads have increased by 300% year-on-year to over 90 million downloads this month (making it the 2nd largest app store by downloads behind Apple)
    – Application submissions have likewise increased by over 400% over the same period
    – The company’s headcount has gone from 20 to 60 employees and it has opened new offices in the United States and the UK
    – The company was recently awarded The Technology Pioneer Award from the World Economic Forum and hailed by TIME magazine as “one of the companies that will change your life”
    – The company signed deals with Sprint, AT&T, Rogers and Yahoo! this year alone
    – The company raised 11 million dollars in series B financing from Accel partners (investors in Facebook, Admob and Real Networks)

    GetJar has its challenges as all fast growing, successful companies do but to allege that we’re struggling is both factually wrong and also extremely poor journalism. Then again its Thanksgiving and we do generally love you guys 😉

    Happy Thanksgiving

    P

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